Question 1

Figure 9-3.The domestic country is China. 
-Refer to Figure 9-3.If China were to abandon a no-trade policy in favor of a free-trade policy,

Accepted Answer

A)  Chinese producers of pencil sharpeners would become worse off.
B)  Chinese consumers of pencil sharpeners would become better off.
C)  total surplus in the Chinese economy would increase.
D)  All of the above are correct.E) None of the above
F) B) and C)

Question 2

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5.Without trade,producer surplus amounts to

Accepted Answer

A)  $810.
B)  $1,620.
C)  $3,240.
D)  $6,480.E) A) and D)
F) None of the above

Question 3

Figure 9-12 
-Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

Accepted Answer

A)  $54 and 800.
B)  $54 and 1,600.
C)  $42 and 800.
D)  $42 and 1,200.E) B) and D)
F) B) and C)

Question 4

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

Accepted Answer

A)  this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade.
B)  this is an indication that the nation has a comparative advantage in producing soybeans.
C)  the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off.
D)  All of the above are correct.E) A) and C)
F) A) and D)

Question 5

Figure 9-23
The following diagram shows the domestic demand and domestic supply for a market.Assume that the world price in this market is $120 per unit. 
-Refer to Figure 9-23.With free trade allowed,this country

Accepted Answer

A)  exports 5 units of the good.
B)  imports 5 units of the good.
C)  exports 13 units of the good.
D)  imports 13 units of the good.E) B) and D)
F) All of the above

Question 6

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6.When a tariff is imposed in the market,domestic producers

Accepted Answer

A)  gain $100 of producer surplus.
B)  gain $150 of producer surplus.
C)  gain $200 of producer surplus.
D)  gain $300 of producer surplus.E) B) and C)
F) A) and B)

Question 7

Figure 9-10.The figure applies to Mexico and the good is rifles. 0) , (Q0,P0) , (Q2,P1) ,and (0,P1) . B) (0,P1) , (0,P2) , (Q0,P0) ,and (Q1,P1) . C) (Q0,P0) , (Q2,P1) ,and (Q1,P1) . D) (0,P0) , (0,P2) ,and (Q0,P0) ." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 9-10.Mexico's gains from trade are represented by the area that is bounded by the points

Accepted Answer

A)  (0,P0) , (Q0,P0) , (Q2,P1) ,and (0,P1) .
B)  (0,P1) , (0,P2) , (Q0,P0) ,and (Q1,P1) .
C)  (Q0,P0) , (Q2,P1) ,and (Q1,P1) .
D)  (0,P0) , (0,P2) ,and (Q0,P0) .E) None of the above
F) C) and D)

Question 8

An import quota

Accepted Answer

A)  is preferable to a tariff since an import quota does not create a deadweight loss.
B)  is a tax on imported goods.
C)  reduces the welfare of domestic consumers.
D)  reduces the welfare of domestic producers.E) A) and B)
F) All of the above

Question 9

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1.When trade in coffee is allowed,consumer surplus in Guatemala

Accepted Answer

A)  increases by the area B + D.
B)  increases by the area C + F.
C)  decreases by the area B + D.
D)  decreases by the area D + G.E) B) and C)
F) A) and D)

Question 10

Suppose the world price of a television is $300.Before Paraguay allowed trade in televisions,the price of a television there was $350.Once Paraguay began allowing trade in televisions with other countries,Paraguay began

Accepted Answer

A)  importing televisions and the price of a television in Paraguay decreased to $300.
B)  importing televisions and the price of a television in Paraguay remained at $350.
C)  exporting televisions and the price of a television in Paraguay decreased to $300.
D)  exporting televisions and the price of a television in Paraguay remained at $350.E) A) and D)
F) B) and C)

Question 11

Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

Accepted Answer

A)  Total surplus in the domestic country falls.
B)  Producer surplus in the domestic country increases.
C)  The domestic country experiences a deadweight loss.
D)  Revenue is raised for the domestic government.E) C) and D)
F) A) and D)

Question 12

Figure 9-15 
-Refer to Figure 9-15.Consumer surplus with the tariff is

Accepted Answer

A)  A.
B)  A + B.
C)  A + C + G.
D)  A + B + C + D +E + F.E) A) and B)
F) C) and D)

Question 13

When a country moves away from a free trade position and imposes a tariff on imports,it causes

Accepted Answer

A)  a decrease in total surplus in the market.
B)  a decrease in producer surplus in the market.
C)  an increase in consumer surplus in the market.
D)  a decrease in revenue to the government.E) C) and D)
F) All of the above

Question 14

Figure 9-14.On the diagram below,Q represents the quantity of crude oil and P represents the price of crude oil. 
-Refer to Figure 9-14.When the country for which the figure is drawn allows international trade in crude oil,

Accepted Answer

A)  consumer surplus changes from the area A + B + D to the area A.
B)  producer surplus changes from the area C to the area B + C + D.
C)  total surplus decreases by the area D.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 15

A tariff is a tax placed on

Accepted Answer

A)  an exported good and it lowers the domestic price of the good below the world price.
B)  an exported good and it ensures that the domestic price of the good stays the same as the world price.
C)  an imported good and it lowers the domestic price of the good below the world price.
D)  an imported good and it raises the domestic price of the good above the world price.E) B) and C)
F) A) and C)

Question 16

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5.If this country allows free trade in tricycles,

Accepted Answer

A)  consumers will gain and producers will lose.
B)  consumers will lose and producers will gain.
C)  both consumers and producers will gain.
D)  both consumers and producers will lose.E) A) and D)
F) B) and C)

Question 17

Figure 9-1
The figure illustrates the market for coffee in Guatemala. 
-Refer to Figure 9-1.When trade in coffee is allowed,producer surplus in Guatemala

Accepted Answer

A)  increases by the area B + D.
B)  increases by the area B + D + G.
C)  decreases by the area C + F.
D)  decreases by the area G.E) All of the above
F) A) and B)

Question 18

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-22.With free trade,the country imports

Accepted Answer

A)  300 units of the good.
B)  600 units of the good.
C)  900 units of the good.
D)  1,200 units of the good.E) C) and D)
F) All of the above

Question 19

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6.The size of the tariff on roses is

Accepted Answer

A)  $4.
B)  $2.
C)  $2
D)  $1.E) A) and C)
F) A) and B)

Question 20

Figure 9-11 
-Refer to Figure 9-11.Producer surplus plus consumer surplus in this market after trade is

Accepted Answer

A)  A + B.
B)  A + B + C.
C)  B + C + D.
D)  A + B + C + D.E) A) and B)
F) A) and C)

Exam 9: Application International Trade: The Winners and Losers From Trade

When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,

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Figure 9-15 -Refer to Figure 9-15.Consumer surplus with the tariff is

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Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market.Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23.With free trade allowed,this country

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Figure 9-12 -Refer to Figure 9-12.With trade,the domestic price and domestic quantity demanded are

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Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1.When trade in coffee is allowed,producer surplus in Guatemala

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Suppose the world price of a television is $300.Before Paraguay allowed trade in televisions,the price of a television there was $350.Once Paraguay began allowing trade in televisions with other countries,Paraguay began

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Figure 9-11 -Refer to Figure 9-11.Producer surplus plus consumer surplus in this market after trade is

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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5.If this country allows free trade in tricycles,

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Figure 9-3.The domestic country is China. -Refer to Figure 9-3.If China were to abandon a no-trade policy in favor of a free-trade policy,

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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6.When a tariff is imposed in the market,domestic producers

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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5.Without trade,producer surplus amounts to

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When a country moves away from a free trade position and imposes a tariff on imports,it causes

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Import quotas and tariffs produce some common results.Which of the following is not one of those common results?

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A tariff is a tax placed on

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Figure 9-14.On the diagram below,Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14.When the country for which the figure is drawn allows international trade in crude oil,

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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6.The size of the tariff on roses is

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An import quota

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Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.Mexico's gains from trade are represented by the area that is bounded by the points

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Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1.When trade in coffee is allowed,consumer surplus in Guatemala

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Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. -Refer to Figure 9-22.With free trade,the country imports

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